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Stocks Surge As Trump, Pelosi Near Economic Relief Deal

By  James Barrett
A board on the floor of the New York Stock Exchange (NYSE) on the floor of the New York Stock Exchange (NYSE) on March 12, 2020 in New York City. The Dow Jones Industrial Average dropped 2,352 points, an almost 10 percent decline and biggest since 1987. (Photo by Jeenah Moon/Getty Images)
Jeenah Moon/Getty Images

After the worst losses since the 1987 “Black Monday” market crash, U.S. stock futures surged early Friday, reaching their “limit up” level of 5% and setting expectations for a significant rebound after the S&P fell 9.5% Thursday. The movement follows signals from House Democrats that they are close to working out an economic relief deal with President Trump, who has laid out a series of emergency relief measures, including payroll tax cuts through the end of the year.

“S&P 500 futures jumped more than 5% to reach their ‘limit up’ level,” CNBC reported Friday morning, in reference to the ceiling set for buying ahead of regular trading. When trading opened, stocks took off. “The Dow Jones Industrial Average soared 1,000 points at the open, or 4.7%,” CNBC reports. “At one point, the Dow was on pace for its biggest one-day gain since March 2009. The S&P 500 jumped 5.2% while the Nasdaq Composite surged 5%.”

As CNBC notes, the positive movement — which includes major gains for Apple (up nearly 7%), Delta (14%), United (9.5%), American (9.2%) and JetBlue (3.6%) — follows Pelosi telling the press Thursday night that House Democrats and the White House have “resolved most of our differences.”

On Wednesday, the Democrats unveiled a multi-billion-dollar relief package, which was immediately criticized by Republicans for including non-coronavirus-specific items and no price tag. On the same day, Trump delivered a televised address in which he detailed a series of “unprecedented” economic relief measures,

While the president repeatedly assured Americans that this will not turn into a “financial crisis,” but is rather “just a temporary moment of time that we will overcome together as a nation and as a world,” he also acknowledged the need for decisive federal action. To address the pandemic, Trump spelled out three key economic relief measures.

“[T]o provide extra support for American workers, families, and businesses, tonight I am announcing the following additional actions,” said the president. The first involved loans to particularly hard-hit companies.

“I am instructing the Small Business Administration to exercise available authority to provide capital and liquidity to firms affected by the coronavirus,” said Trump. “Effective immediately, the SBA will begin providing economic loans in affected states and territories.  These low-interest loans will help small businesses overcome temporary economic disruptions caused by the virus.  To this end, I am asking Congress to increase funding for this program by an additional $50 billion.”

The next measure he outlined is more than $200 billion in deferred tax payments. “Using emergency authority, I will be instructing the Treasury Department to defer tax payments, without interest or penalties, for certain individuals and businesses negatively impacted,” he said, estimating that the action would  “provide more than $200 billion of additional liquidity to the economy.”

“Finally, I am calling on Congress to provide Americans with immediate payroll tax relief.  Hopefully they will consider this very strongly,” he said.

The president has since repeatedly pushed his payroll tax relief recommendation to Congress. “If you want to get money into the hands of people quickly & efficiently, let them have the full money that they earned, APPROVE A PAYROLL TAX CUT until the end of the year, December 31. Then you are doing something that is really meaningful. Only that will make a big difference!” Trump tweeted Friday morning.

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